Housing market looking up

State economists and local housing officials are heartened by what they see as signs that the housing market has stabilized and is expected to begin improving after 2012.

John Tuccillo, chief economist for Orlando-based Florida Realtors, said state median home sales across the state have increased 15 percent since January and home prices have increased 10 percent.

“I think we’ll see continual improvement through 2012,” Tuccillo said. “Once we get through 2012, we’ll see more rapid movement.”

Locally, “Things are starting to turn around, and they have been for a number of months,” said Melanie Green, communications director for Jacksonville-based North East Florida Association of Realtors.

“We’ve seen major jumps in absorption (sales) and stabilization of prices,” Green said.

The local housing price decline has leveled off in some local neighborhoods and some say prices and sales may improve as soon as 2013.

A leading state economist also forecasts continued improvement.

“Three or four years from now, it most likely will be a completely different market,” said Sean Snaith, director of the UCF Institute for Economic Competitiveness. “Once the recovery picks up some steam, the demand for housing will come back and Florida still is a desirable location …”

That doesn’t mean that the market will go back to boom times, though.

State growth slows

A recent article in the New York Times stated that Florida had seen its first migration loss since the 1940s, with 30,000 fewer people moving into the state in 2009.

“The continuing economic downturn has drastically altered the internal migration habits of Americans, turning the flood of migrants into the Sun Belt and out of states like New York, Massachusetts and California into a relative trickle,” the article states.

It’s unclear how that will impact housing prices.

“It’s tough to say where prices would be, but I would think they would be more likely to be going up in four years than going down,” Snaith said. “Or, they could slide sideways.”

Whether your home price has stabilized depends on where you live, said Dianne Pittman, vice president/managing broker of the Watson Realty office on U.S. 1.

“It’s different by neighborhood,” Pittman said. “We are seeing stabilization in certain areas of the county and in particular neighborhoods, but certain neighborhoods are still dropping.”

She said the island as a whole and the beach area “seems to ... be stabilizing very nicely.”

On the mainland, she said, the Oakbrook neighborhood seems to have leveled off.

Pittman said prospects overall are good because “we are very blessed here; we have water everywhere and that’s what people want.”

She said another influx of distressed properties is coming into the marketplace, “so we may see that teeter a bit.”

The stabilization of home prices is important because people tend to hold back on their spending when the value of their house goes down, according to another recent article in The New York Times. Research shows that Americans reduce their spending by $20 to $70 a year for every $1,000 decline in their home values, according to the article.

That same article quoted a paper by a Wellesley College economics professor as saying home price decline caused consumers to spend $240 billion less in 2010.

“That figure is equal to about 1.7 percent of annual economic activity, enough to be the difference between the mediocre recent growth and healthy growth,” the article states.

Green also expected the housing market, including house prices, to continue to improve — barring a major disaster or negative governmental interference.

“If things were to stay on the path they’re on, we’ll be in good shape,” Green said. “Locally, in Northeast Florida, what we’ve seen is a strong absorption (sale) of properties. We’ve had far more properties on the market than need to be but they’re being absorbed.”

Key is jobs

The approval of large, new housing developments has concerned some residents who worry that new homes sales would keep existing home prices low.

But projects approved now — such as Old Brick Township in Flagler County on the St. Johns County border — don’t necessarily mean a delay in housing recovery.

“I think the thing that is prolonging the recovery is the labor market, not building homes in the future,” Snaith of UCF said.

And while new housing developments generally cause “a dampening effect on homes and prices,” Tuccillo said, that’s only after they’re built and that could take many years.

“I think the bottom line is: Don’t believe that permits will necessarily result in houses,” Tuccillo said, giving some South Florida neighborhoods as an example.

He said those planned neighborhoods had nicely planned infrastructure and “not the first stick in the ground.”

Tuccillo said the market “is not going to take off like a shot,” but rather would show “this kind of incremental growth that we’ve seen.”

Tuccillo said the reason for that was “the wet blanket of distressed properties that’s laying on top of the market.”

Green said some initiatives introduced by President Barack Obama might help the recovery along but also said the job market was key to long-term growth.

“We applaud all measures to help the housing market, but people need jobs to stay in those homes,” Green said. “We know that, long-term job creation is still key. There are a lot of variables in the mix.”

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I don't know how much anything can recover when no one us working. Yes Florida is a desirable place to live; but when retirees have had the retirement accounts raided by wallstreet and working age people have no place to invest to help their retirement accounts grow and there are no jobs for people to come down here to rare their families, who's gonna move down here. Apparently people looking for oxycontin. That's it! There are still a but load of foreclosures to come in saint johns county. I'm living near some of them. People renting out the houses that they're not paying the mortgage. How is that a healing housing market.
When it does recover don't expect 2004 again. The beating may stop but there will still be alot of swelling for a long time.